Nn-based Clothier Va. Specialty Stores Files For Bankruptcy

Citing increased competition and a weak retail market, Virginia Specialty Stores Inc. announced Tuesday that it has filed for reorganization under Chapter 11 of the Federal Bankruptcy Code.

The Newport News-based clothing chain filed for protection Monday in the United States Bankruptcy Court for the Southern District of New York. The company, which operates 133 stores, announced that it will close approximately 30 stores in the next few days.

A company spokesman said the closings would not affect the company's Virginia operations.

"During the rapid economic expansion after the 1982 recession, the company expanded into new markets and opened units that have fallen victim to the current nationwide economic downturn and slowness in the apparel market," said company president Walter Segaloff in a statement released Tuesday.

"The filing and subsequent reorganization will enable the company to enter the last decade of this century as a lean, viable retail entity," said Segaloff, who was could not be reached for comment Tuesday night.

Virginia Specialty sells large-sized ladies apparel locally under the name Added Dimensions. The company also operates The Answer discount clothing chain.

Virginia Specialty consisted of approximately 40 stores at the start of 1982, when the company launched into an expansion campaign that in three years would give it 104 stores in 16 states. At one point the company shuttled 5 million pieces of merchandise a year from its Washington Avenue headquarters and distribution center.

Company spokeswoman Ann Robinson said most of the store closings will take place in Texas and Louisiana, recession-hit areas where the chain's stores have become unprofitable. "We hit it at the wrong time," she said.

Robinson said she did not know the size of the company's debt or its assets, or the identity of its primary creditors.

Virginia Specialty operates six stores in Hampton Roads, with two stores in the Richmond area and another in Roanoke. Robinson said Tuesday the company's action would have no effect on its Virginia stores. "It's business as usual," she said.

Robinson said the company would have more than 1,000 employees by the time the store closings were completed.

She said she could not give a definite figure as to how many jobs would be lost by the closings.